erm request on ego, page-2

Watch out ERM

Empire yet to respond to ERM Power's request for information
ERM Power Limited (ASX: EPW) advises that on 2 October 2013 it sent a letter to the
Directors of Empire Oil & Gas NL (ASX: EGO) containing a series of requests for information
in light of the disclosures contained in Empire’s Annual Report for the year to 30 June 2013
which was released to ASX on 30 September 2013.

The requests for information relate in particular to the disclosure of the employment contract
of Empire Managing Director Craig Marshall and the disclosure that Empire has incurred
legal costs under an indemnity provided to some Empire Directors in defamation actions
against certain Empire shareholders and other parties.

ERM Power's letter to Empire Directors states:

“The Annual Report at page 56 refers to the new employment contract with Craig Marshall.

ERM refers Empire to Listing Rule 3.16.4 and obligations to immediately disclose material
terms of employment for the Managing Director.

ERM requests that Empire:

1. confirm the date that the Empire board resolved to enter into the new employment
contract with Craig Marshall and the date that it was entered into;

2. advise why Empire has not disclosed material termination rights and termination
payments under the new employment contract;

3. advise the reasons for the new employment contract and basis for remuneration
levels and leave loading levels;

4. advise the status of the original consultancy arrangement with Craig Marshall and
any payments if terminated; and

5. advise if material terms of the employment contract were released immediately by
Empire in accordance with Listing Rule 3.16.4.”

ERM Power's letter to Empire Directors also states in relation to the Directors' Indemnitty:

“The Annual Report at page 92 refers to legal fees incurred by the Directors of Empire in
relation to defamation proceedings commenced by the Directors. The Annual Report at page
106 refers to an indemnity provided by Empire to the Directors in relation to these
defamation proceedings against certain shareholders and other parties.


ERM notes that Chapter 2E of the Corporations Act requires that for a public company,
provision of a financial benefit to the directors must be approved by members. ERM notes
that section 212 of the Corporations Act provides an exemption to the above requirement of
member approval where the financial benefit is in the form of an indemnity for reasonable
costs in respect of defending an action for a liability incurred as an officer.

ERM requests that Empire:

1. explain the reasons why the action and the indemnity provided by Empire to its
Directors is in the best interests of shareholders;

2. explain why the arrangements referred to above do not require member approval;
and

3. provide details of the indemnities relied upon by the Directors.”

ERM Power has requested that Empire requisition a meeting of shareholders to consider a
series of resolutions which, if approved, will see three of Empire’s current Directors removed
from the Board and two new Directors appointed (see ASX release dated 27 September
2013).

Given that it has requisitioned a meeting, ERM Power continues to believe that a timely
response is required by Empire to ERM Power's request, which ERM Power believes will be
relevant information to all Empire shareholders. Empire Directors did not respond to ERM
Power's requests in the timeframe provided by ERM Power.

ERM Power is still yet to receive a response from Empire to its requests of 2 October 2013
but will continue to seek a response.